Quick Read:
- 77% of startups raise capital in dollars while earning revenue in naira, creating structural tension that favours offshore exits.
- 46% of founders prefer acquisition exits; only 21% would consider IPOs
- Despite challenges, 42% of founders would consider listing on the NGX under improved conditions
A new report has uncovered systemic barriers that prevent Nigeria’s high-growth startups from listing on the local exchange, posing a risk to long-term sustainability and local wealth creation in Africa’s largest economy.
Despite the launch of the NGX Technology Board in 2022, there have been no tech listings to date. Surveyed founders point to a clear knowledge gap, with a majority (53%) stating they are not sufficiently aware of the NGX listing process.
TLP Advisory, a cross-border venture law practice with its origins in Nigeria, released the new report titled “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX.”
This information gap is compounded by exit preferences, with nearly half (46%) favouring acquisitions, compared with about one in five (21%) who would consider an IPO – many of whom aspire to list on foreign exchanges.
Structural challenges amplify the issue. The TLP Advisory report finds that the majority (77%) of funded startups raise in dollars but earn revenue in naira, creating a strong incentive for offshore exits.
Furthermore, a minority cite market frictions: 26% point to compliance costs and potential undervaluation, while a smaller share [16%] highlight limited market liquidity as a key concern.
Yet, there is appetite for a local solution, with around two in five (42%) open to an NGX listing if the right reforms are in place, and more than half expressing positive sentiment overall.
Speaking at the report launch at the Africa Prosperity Summit (APS), hosted by Ventures Platform, Odunoluwa Longe, Co-founder of TLP Advisory, said:
“Nigeria’s startups have proven they can build globally competitive businesses, but too much value still flows offshore because viable local exit routes are limited. Our report shows the issue isn’t founder ambition or rejection of the NGX; it’s a disconnect propelled by information gaps, perceived illiquidity, and a currency mismatch that makes dollar-denominated exits more attractive for venture-backed companies. With clarity, practical education and confidence-building – and by aligning regulators, founders, investors, and policymakers – we can turn the NGX into a genuine platform for growth-stage innovation and long-term wealth creation in Nigeria.”
TLP Advisory’s report is the first Nigeria-focused assessment of startup readiness for local listings, and sets out practical frameworks to unlock the NGX. It draws on desk research, a founder survey, and interviews with stakeholders, including Jude Chiemeka (CEO, Nigerian Exchange Limited – NGX), Adekunle Awojobi (CEO, Honnete Solutions Limited & former CEO of FBN Trustees), Adewale Yusuf (Founder, AltSchool Africa), Idris Bello (Founding Partner, LoftyInc Capital Management) and Dolapo Morgan (Investment Principal, Ventures Platform).
The study benchmarks Nigeria against six peer markets, South Africa, Kenya, Egypt, Ghana, India, and Brazil, as well as two mature exchanges, the UK’s Alternative Investment Market (AIM) and the US NASDAQ.
By combining qualitative insights from founders, investors, and advisers with cross-market analysis, the report provides a clear, actionable view of how to enable startup listings and exits – with India’s mobilisation of domestic capital, supported by pension reform, highlighted as a practical blueprint to adapt.
To bridge this critical gap and unlock Nigeria’s capital markets, TLP Advisory urges key stakeholders to implement the following recommendations:
- Enhancing Education & Awareness: Continuous engagement through roadshows, workshops, and practical playbooks can equip founders, investors, and advisers with the knowledge needed to navigate local listings effectively.
- Reforming Regulatory & Listing Frameworks: Simplifying requirements and documentation, while maintaining transparency and investor protection, will make the NGX more accessible to high-growth startups.
- Market Liquidity & Investor Participation: Strengthening liquidity through market-making mechanisms, broader institutional participation, and incentives for retail investors will create a more vibrant, investable ecosystem.
- Addressing Currency Mismatch: Deepening local capital pools and exploring dual or cross-listing partnerships with exchanges such as NASDAQ, AIM, and the JSE can reduce reliance on offshore exits and support sustainable local growth..
Adewale Yusuf, founder and CEO of AltSchool Africa, emphasising the need for greater awareness, said,
“The NGX needs to actively engage founders and use them as channels to show what’s possible on the exchange. Local investors also need to step in. Many of us don’t fully understand the process or requirements. By putting clear structures and educational support in place, founders can see exactly what it takes to list, and confidence in the local market will grow. “
Launched in 2014, TLP Advisory has advised over 250 clients in the Nigerian technology and venture ecosystem on transactions spanning institutional investments, M&A, intellectual property, and international expansion strategies.
TLP Advisory was also one of only two law firms to draft the landmark 2023 Nigerian Startup Act, which established the legal framework for key regulatory bodies to provide an enabling environment and support to startups in Nigeria. Through its legal-tech product, DIYLaw, TLP has supported more than 200,000 businesses.
Supported by key partners, including Wimbart and Ventures Platform, the report serves as a critical call to action for stakeholders invested in Nigeria’s digital economy.
The full report can be downloaded for free: link.